Source: CGTN Published: 2019-3-30
The China-U.S. relationship has been dominating international politics against the backdrop of the long-drawn-out trade conflict, the interactions between the top two players in the global economy and politics have been thrust into the limelight.
Where is the strategic game between Beijing and Washington heading? How can we interpret their power transition?
The Chongyang Institute for Financial Studies, Renmin University of China, recently released a report.
Numbers show that the two global players are seeing a shrinking gap in economic size. While China's GDP percentage of the world's total has doubled in the past 10 years, the figure was nearly unchanged for the U.S., hovering at around 24 percent.
China's foreign trade volume reached a record high at 4.51 trillion U.S. dollars in 2018, surpassing that of the United States. In terms of finance, more than 65 percent of Chinese e-transactions were made through mobile phones – three times that in the United States.
Regarding technological input, China saw a 34-percent increase in 2018, compared with 7.8 percent in the United States. Chinese-made high-tech exports have experienced a steady rise in the past decade, against a decline over the same period in the U.S..
China has been actively engaging with international and regional organizations, such as the G20, WTO, and SCO, exerting growing influences on the rule-writing process. Although the U.S. has a great say in international affairs, the world system is gradually developing toward fairness and justice.
Despite China's rapid rise, the U.S.' dominant status is unlikely to teeter. There are still wide gaps in their hard power – China's tertiary industry contributed 54.3 percent to GDP growth in the first half of 2018, lower than the U.S.' 80.6 percent; China's urbanization rate stood at 59 percent last year, far below the U.S.' 82 percent; China ranked 110th in the 2018 Index of Economic Freedom, while the U.S. was 18th; Washington's defense budget was three times that of Beijing's in 2018.
Regarding soft power, U.S.-led developed countries are still dominating international mechanisms. Although the China-proposed Belt and Road Initiative and its concept of "a community with a shared future for mankind" are recognized by the UN, it is not wielding its due influence on international affairs.
The U.S. has three trump cards to contain its rivals – the dollar, the military and its status as a rule-maker. China cannot hold a candle to the U.S. in this regard.
Foreign exchange reserves denominated by RMB accounted for only 1.8 percent of the world's total by the end of the third quarter in 2018, dwarfed by the 61.9 percent held in U.S. dollars.
While a majority of American companies have their own R&D labs, a comprehensive innovation system is yet to be established in China. In addition, the U.S. is more influential in cultural exports.
In summary, China is shifting from a strategically passive status to a strategic peer of the United States. In general, Sino-U.S. conflicts are long-lasting and severe. China should respond to U.S. aggressiveness with patience and composure, stick to innovation-driven development strategy and make it a new growth engine for the world economy and establish a network of international cooperation for a fairer global system.